The state of Alabama has become the second state in the United States to raise concerns over BlockFi, a major cryptocurrency lending platform.
The Alabama Securities Commission (ASC) has issued a show-cause order to New Jersey-based company BlockFi, ASC director Joseph Borg officially announced on Wednesday.
Already facing a cease and desist order from the New Jersey Bureau of Securities, BlockFi now has 28 days to provide cause why the platform should not be forced to cease and desist from selling “unregistered securities” in Alabama, the regulator said.
According to the ASC, BlockFi’s interest-earning cryptocurrency BlockFi Interest Accounts constitute securities. “BlockFi has raised at least $14.7 billion worldwide through the sale of these securities,” the regulator claimed.
The ASC alleged that BlockFi, alongside its affiliates BlockFi Lending and BlockFi Trading, has been funding its crypto lending operations and trading “at least in part” through funds generated from the sale of unregistered securities in violation of securities laws. The order also claimed that BlockFi has